* STOXX 600 now set for best day since late-2008
* All European sub-indexes trading higher
* Italian stocks surge as banks track rise in bond yields
* Roche jumps after emergency FDA nod for virus test (Updates movements, milestones)
March 13 (Reuters) - European stocks staged a solid comeback, rising 8% by Friday afternoon after record losses in the previous session, as hopes grew for coordinated stimulus efforts to stymie the economic shock from the coronavirus pandemic.
The benchmark STOXX 600 index was poised for its best daily gain since 2008 following a record 11.5% crash on Thursday that erased more than $1 trillion from the value of European firms.
While an underwhelming stimulus package from the European Central Bank had prompted extended selling in markets on Thursday, investors were holding out for injections of liquidity from other major banks, including the U.S. Federal Reserve.
Italian stocks, which have been among the hardest hit as the country has so far been the worst-affected in Europe by the outbreak, jumped more than 17%, recovering from a more-than seven-year low.
Gains were broad-based, with automobiles and utilities outperforming other sectors.
The banking sector also surged, tracking a rise in euro zone bond yields, with Italian banks Banco BPM,FinecoBank Banca Fineco and Unione di Banche Italiane
leading gains in the sector.
"Markets have got to a point where if you have a six- to 12-month horizon the risk-reward is shifting towards the upside," said Rupert Thompson, head of research at asset manager Kingswood.
"The key question now is not 'are we going to have a short-lived recession in Q1 and Q2'," he said. "The key question is 'whether the recession lingers on to the second half of the year'. If that happens, quite possibly markets could fall somewhat further."
Asian equity markets had looked set to mirror carnage on Wall Street in early trading, with bourses from Seoul to Jakarta setting off down-limit circuit breakers before finding a floor as hopes turned to a U.S. stimulus package.
Traders are also betting on the U.S. Federal Reserve to cut rates for a second time this month at its policy meeting next week.
Swiss diagnostics maker Roche jumped 10.6% after the U.S. Food and Drug Administration issued emergency authorisation for a faster coronavirus test made by the company. After six straight days of declines, the stock was on track for its best day ever.
Only five constituents on the STOXX 600 were trading in the red.
British cinema operator Cineworld sank 16% to the bottom of the STOXX 600 amid continued concerns over the impact of the outbreak on its business. The firm had warned on Thursday that it could potentially fail to meet its debt commitments due to the outbreak. (Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Anil D'Silva, Bernard Orr and Alex Richardson)